Geely expects flat sales in China this year
March 26, 2019 Category China News Round-up, Weekly
Geely Automobile Holdings, whose founder Li Shufu is the largest single shareholder of Daimler, said sales of its portfolio of brands including Lynk and Volvo, are likely to remain flat this year in China, as economic growth slows down in the world’s largest vehicle market. The Zhejiang-based carmaker sold 44% fewer vehicles in December, causing Geely to miss its 2018 sales target by 5%. Car sales in China sputtered last year after the nation surpassed the United States in 2009 as the largest vehicle market on earth. Sales last year fell 2.8%, as a slowing economy and the trade war with the U.S. gave consumers cause for pause in committing to their biggest non-real estate purchases. Sales slid further by 9.8% in the first two months of the year compared with the same period in 2017.
“The prevailing political and economic uncertainties should continue to affect the passenger vehicle market in China and could cause the current slowdown in motor vehicle demand to continue into 2019,” Geely said in its earnings report, adding that sales would remain flat this year. Still, 2018 sales rose 20% to 1.5 million units, driving up Geely’s revenue by 14.9% to CNY106.6 billion. Net profit jumped 18% to a record CNY12.55 billion. A reduction of VAT as of April 1 is expected to lead to lower car prices, pushing up sales.
Besides owning Volvo, Geely also operates a venture with the Swedish carmaker called Lynk. The Chinese carmaker also owns Malaysia’s once-dominant Proton brand, as well as the assembly for London’s black taxi cabs. Geely’s founder and chief executive Li owns 9.7% of Daimler, the South China Morning Post reports.
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